Marin Voice: Sustainability and greenwashing

IN 1972, the United Nations and the Club of Rome convened the Stockholm Conference to explore the emerging data that showed environmental degradation inevitably followed significant economic development in the developed world as well as in emerging economies. That conference coined the term "sustainable development."

Fifteen years later, the U.N. Environment Programme published the Bruntdland Commission Report, "Our Common Future," which put substance and policy to the emerging discipline of sustainable development.

Now, 38 years later, the term "sustainable" and "green" have become common, and virtually every business, product, city and consultant is keen to convince you they have always been green. These "green claims" are ubiquitous, from green buildings to green tech to green products. We are awash in green claims from businesses, cities and other organizations.

And, as so often accompanies such "trends," the terms green and sustainable have begun to lose their meaning.

It is becoming impossible to distinguish the authenticity or validity of these green claims by businesses. But there are clear techniques to separate what I call the "liars" from the "sages."

- First: What is the vintage of their claims? If the company, organization or product has been involved in a consistent effort to measurably portray their "greening" or sustainability performance over a protracted period of time (e.g., the work of InterfaceFLOR, Patagonia, etc.), there is a greater likelihood that there is substance to their green claims. In this context, sustainability begins to approach our ideas of product quality, including a mandate for building products and working with processes that cause the least harm to the environment.

A company that evaluates the raw materials it uses, invests in innovative technologies, rigorously polices its waste generation and uses a portion of its sales to support groups working to meaningfully educate the public on sustainability issues, more likely than not backs their green claims with substance. Short of these kinds of substantive supporting steps, green claims are likely hollow.

- Second: Do the green claims go beyond carbon reduction and environmental issues? Sustainable development is grounded not on environmental or ecological issues, but on balanced decision-making. The fundamental duty of the entrepreneur and the manager is to use all resources at their disposal with maximum effectiveness, responsibility and efficiency. This applies to the so-called "triple bottom line" of human capital (the work of people, the realm of ideas and innovation, etc.), natural capital (use of water, pulp, metals, and other materials extracted from nature), and financial capital.

Green claims, to be substantive and legitimate, must not only relate to environmental responsibility, but must also acknowledge these broader corporate citizenship obligations of large corporations, medium-sized companies, and small businesses to conduct their operations as to benefit society in general first, as a predicate to bringing profit to their investors.

- Third: Another problem with green claims is the fact that most self-promotion based on the triple bottom line simply misses the point. Properly operated, business enterprises have a public duty to not only minimize the harm they cause to nature and people, but to provide net benefits to their stakeholders, shareholders and others affected by their operations.

I refer to this, as does architect William McDonough, as the "Triple Top Line." Companies making green claims that acknowledge their obligations to return more to society and nature than they take, and prove it by providing measures of Triple Top Line "profits," deserve our support and investment as true innovators and responsible businesses. The data is clear that such firms outperform their competitors financially.

In the end, we need some new grammar.

As I have said, sustainable development is rooted in notions of minimizing the harm we do today so as to provide the possibility that future generations can thrive I argue that sustainable development is just, well, so yesterday.

In Dominican's MBA program, we focus our attention and the transformation of executives, enterprises, and ultimately the world of business on "regenerative enterprise."

The regenerative enterprise makes decisions, manufactures products, provides services, constructs buildings, and undertakes all of its dealings only after developing clear means to ensure that these activities will, over the medium and long term, enhance the financial, social and ecological well-being of all communities of interest they affect.

This is the future course of business.

And there are billions of dollars of profit, and immeasurable positive reputational benefits and competitive advantage, to be unlocked by this regenerative enterprise value proposition.

Edward L. Quevedo is a faculty member of Dominican University's MBA Program in Sustainable Enterprise. He is senior counsel at Paladin Law Group in Walnut Creek. He will be the keynote speaker

at the Business-Environment Breakfast Forum at 7:30 a.m. March 19 at Dominican University in San Rafael. The event is cosponsored by North Bay Leadership Council, Marin Conservation League and Dominican University Institute of Leadership Studies. For details, contact mcl@marinconservationleague.org or 415-485-6257.